HONG KONG--(BUSINESS WIRE)--A.M. Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” to LIG Insurance (China) Co Ltd (LIG China) (China). The outlook assigned to these Credit Ratings (ratings) is stable.
LIG China is a property/casualty insurer in China, established in 2009. It is wholly owned by KB Insurance Co., Ltd. (KB Insurance), a Korea-based company that is a wholly owned subsidiary of KB Financial Group Inc. Headquartered in Jiangsu with a branch office in Guangdong, LIG China focuses on commercial property, liability and credit lines of business.
The ratings reflect LIG China’s balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The ratings also reflect the implicit support the company receives from its parent, KB Insurance.
LIG China’s very strong balance sheet strength is supported by risk-adjusted capitalization being at the strongest level and by very low underwriting leverage relative to its peers. Overall operating performance is adequate, underpinned by a stable stream of interest income that is significant in size compared with its net earned premium. The company occupies a niche market by focusing on servicing Korean companies that operate in China; LIG China has a competitive advantage in this market due to its long-term relationships with those companies.
Offsetting rating factors include a high dependency on reinsurance and a high management expense ratio due to its small premium base. The company’s niche market also limits its future business growth.
Positive rating actions could occur if LIG China continues to demonstrate an improving business profile and favorable and stable operating results, while maintaining its solid risk-adjusted capitalization.
Negative rating actions could occur if there is significant deterioration in the company’s operating performance or if there is a substantial decline in its risk-adjusted capitalization.
Ratings are communicated to rated entities prior to publication. Unless stated otherwise, the ratings were not amended subsequent to that communication.
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